Netherlands proposes EUR 18 carbon price floor

On 10 October 2017, the Netherlands Prime Minister Mark Rutte announced that the incoming Dutch government plans to establish a EUR 18 carbon price floor in the electricity sector. The initiative is part of the coalition agreement of the incoming Dutch government. Under the proposal, companies would be charged an additional levy based on the price difference between the EU allowances (EUAs) and the price floor. The price floor would start in 2020 and gradually rise to EUR 43 by 2030. Other EU Member States are also implementing or considering additional national policies to supplement the price signal from the EU ETS, reflecting concerns that the system currently does not provide sufficient incentives for abatement. Since 2013, the UK has imposed a carbon price floor in the electricity sector, which is currently set at GBP 18/ton (ca. EUR 20) until 2021. A price floor is also being considered by other Member States, including France, which put forward a proposal for a EUR 30 price floor for the power sector.

The proposal is part of a broader climate package by the new Dutch government to reduce CO2 emissions 49% in 2030 compared to 1990 levels and incorporate national climate targets into domestic law. In addition to the price floor, the government proposes to phase out coal power by 2030, as well as purchase additional EUAs to ensure the elimination of coal from the electricity sector does not make it cheaper to increase emissions in other sectors.